The financial markets play an important role in channeling funds from savers to borrowers. Which of the following illustrates this function of financial markets?(1 point)

Question

Responses

Investors deposit funds into interest-bearing accounts which are then loaned to borrowers.
Investors deposit funds into interest-bearing accounts which are then loaned to borrowers.

Investors purchase securities that are issued by firms and governments.
Investors purchase securities that are issued by firms and governments.

Investors purchase securities that are issued by firms and governments.
Investors purchase securities that are issued by firms and governments.

Investors purchase assets like real estate and gold from other investors.

Answer 1

The option that best illustrates the function of financial markets in channeling funds from savers to borrowers is:

Investors purchase securities that are issued by firms and governments.

This option highlights the role of financial markets in facilitating the transfer of funds, as investors providing capital to firms and governments through the purchase of securities enables these entities to borrow and finance their activities.